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Resources boom won't last forever: Robb

Colin Brinsden, AAP Economics Correspondent

Opposition finance spokesman Andrew Robb has warned that Australia's China-led resources boom won't last forever, but the federal government says he should stop "trash talking" the economy.

In the third major speech on the economy by an opposition MP in the past fortnight, Mr Robb said Labor was living on "hope and prayer" that China's strength would continue to fund the biggest spending spree in the nation's history.

The government has already racked up record deficits of $167 billion in just four years.

"If the Europe-focused sovereign debt crisis leads to faltering demand for China's exports, the risk is that bulk commodity prices could be in for a much sharper fall than is built into the current official forecasts," Mr Robb told a conference in Melbourne on Friday.

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He told the Victorian Employers' Chamber of Commerce and Industry that China has downgraded its growth forecast for 2012 to 7.5 per cent, well below the average growth for the past decade.

"For the Gillard government, the China resources boom has been like the overtime the factory worker once enjoyed, but boom times don't last forever," he said.

"The Gillard government won the lottery with the resources boom and are in the middle of wasting it."

Finance Minister Penny Wong said Mr Robb's persistent "trash talking" of the Australian economy had reached fever pitch as the coalition tried to divert attention from its opposition to the government's business tax cuts.

The coalition will oppose the government's 30 per cent minerals resource rent tax (MRRT) on coal and iron ore super profits that is being debated in the Senate, and the spending measures tied to it.

This includes a cut in the corporate tax rate to 29 per cent from 30 per cent for small business in 2012-13, and for all companies from 2013-14.

The Australian Greens, who hold the balance of power in the Senate, oppose the $2.4 billion of tax cuts for big business but back the reduction for small business.

Treasurer Wayne Swan thought it a "pretty odd combination" of the Liberals and Greens aligning to block the tax cuts.

"I'm just gobsmacked that the Liberal Party doesn't have the commonsense to recognise the need for a tax cut for the many companies that are struggling and aren't in the fast lane of the mining boom," he told reporters in Canberra.

Mr Swan had been addressing the Tax Institute's national convention, where he confirmed that the government was on track to deliver a budget surplus in 2012-13 in spite of the global financial crisis ripping $140 billion from revenues.

"Gone are the days when tax reform is accompanied by big bribes that get communities or industries on board."

Australian Greens Leader Bob Brown said the treasurer only had himself to blame by watering down the original 40 per cent resources super profits tax that covered all minerals, and would have brought in an additional $100 billion of revenue over the next decade.

The Greens want the MRRT extended to gold, uranium and rare earths.

"On top of that they want the budget to be back in the black this year," Senator Brown told reporters in Canberra.

"So they have got themselves straitjacketed, although not so much as the opposition that has got a $70 billion black hole."